Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Pretend you’re a managing partner with a passel of young associates panting after top-dollar pay. Other firms are snapping at your heels, trying to steal your talent away. You can’t afford a six-figure base salary, but you want to compensate first-years fairly. And maybe you’d like them to pay for themselves a little faster than normal. Or maybe you don’t want young lawyers to bill ’til they drop, and want to preserve your firm’s culture without driving it into the poorhouse. What do you do? Some firms around Atlanta are motivating young lawyers with partner-like incentives and reward systems. And in one case, a firm is preserving its culture with a bonus plan that makes teamwork — not time billed or business generated — the first, mandatory requirement toward a bonus. When six-figure salaries sprouted inside the Perimeter –northwest Atlanta’s financial district — Marietta’s Brock, Clay, Calhoun, Wilson & Rogers rethought its method of motivating young lawyers. “You really can’t chase a salary like that. It really is a difficult environment,” says principal Glenn Brock. The firm didn’t raise its $50,000 base pay for first-years from last year, but did create a new incentive system. Brock Clay gives associates one-third of all the receipts that they produce over two-and-a-half times their base salary. For an associate whose base pay is $50,000, two-and-half-times salary is $125,000. If that associate bills $200,000, he or she receives one-third of the additional $75,000. That’s a $25,000 bonus. Brock discounts the notion that young lawyers don’t pay for themselves until their third year. His firm, he says, has first-years who already are paying their way. Other firms that give bonuses based on the income that an associate produces: Smith, Welch & Brittain in Stockbridge and Robertson & Walker in Woodstock. At Deming, Parker, Hoffman, Green & Campbell in Norcross, business origination starts early and starts easy. The firm, which pays first-year associates between $40,000 and $45,000, is willing to reward associates who bring in virtually any lead that turns into business, says principal Jim Green. Associates are rewarded for bringing in cases of their own, but Green says even if all an associate provides is a name or phone number that a partner eventually turns into business, the associate still gets 30 percent of the firm’s fee on the matter. That’s true even if the associate never works on the case, Green says. One associate, he says, recently made $12,000 for bringing in business. At intellectual property boutique Gardner & Groff, pay is structured to encourage people to produce, and to pay them fairly when they do it, says principal Arthur A. Gardner. “Our model is based on our associate income being equal to 45 percent of billings,” says Gardner. At some big firms, he points out, associates may make only 20 to 35 percent of billings. For example, a firm that charges out associates at $150 an hour and requires them to bill 2,000 hours makes $300,000. If the associate’s salary is $100,000, he or she is getting only 33 percent of billings, Gardner points out. “People become disillusioned with that because they’re billing big numbers and they’re only getting a small piece of that, and where does the rest go?” he says. At Gardner & Groff, a new associate earns $90,000 and keeps 45 percent of his or her hourly rate for time billed over 1,320 hours. Under that system, a first-year who billed an additional 525 hours at $150 an hour — for a total of 1,845 hours — would earn $125,438. IP boutiques Thomas, Kayden, Horstemeyer & Risley and Needle & Rosenberg have somewhat similar incentive programs for their young lawyers. Another firm designed its bonus structure to preserve firm culture. Miller & Martin, a Chattanooga, Tenn.-based firm with an Atlanta office, boosted its first-year pay from the mid-$70,000s to $85,000 with a $3,000 signing bonus, according to local managing partner Peter B. Glass. The firm also created a three-step bonus system where teamwork trumps the billable hour. To be eligible, the associate first must demonstrate teamwork and what Glass calls “firm-mindedness.” The associate also must excel in client service. If those criteria are met, then the firm looks at billable hours, pro bono and other factors, he says. The third step is an examination of skills, practice development and other criteria. But, Glass says, if the teamwork/client service criteria aren’t met, even a high-billing associate won’t be considered for a bonus. Julia D. Gray contributed to this story.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.